China working with U.S. to prevent Chinese firms from being delisted from U.s. stock exchanges

HONG KONG Chinese authorities are working with the U.S. counterparts to prevent Chinese companies from U.S. stock exchanges from being delisted from U.S. stock exchanges, a Chinese regulatory official said on Thursday. A long dispute over auditing standards rumbles on.

U.S. authorities are moving towards kicking foreign companies off of https: www.reuters. US-SEC-foreigncompanies idUSKBN 2 BG 2 AI American stock exchanges if their audits don't meet U.S. standards.

The Public Company Accounting Oversight Board PCAOB and U.S. policy makers have complained of a lack of access to audit working papers for U.S. listed Chinese companies. Citing national security concerns, Chinese authorities have been reticent to allow overseas regulators to look at working papers from local accounting firms.

We don't think that delisting Chinese firms from the US market is a good thing for the companies, for global investors or Chinese-US relations, Shen Bing, director general of the China Securities Regulatory Commission's department of international affairs, told a conference in Hong Kong.

The communication is smooth and open, and we are working hard to resolve the auditing issue with the U.S. counterparts. He said there is a chance of a delisting of these companies but we are working very hard to prevent it from happening.

In December 2020, President Donald Trump signed a law aimed at removing foreign companies from U.S. exchanges if they don't meet American auditing standards for three years in a row.

According to the map on the organisation's website https: pcaobus.org oversight international showed China as the only jurisdiction that denied the PCAOB access to conduct oversight. Speaking at the same conference, Ashley Alder, CEO of Hong Kong's Securities and Futures Commission, said he feared Sino-U. Politics can interrupt technical solutions that are sensible and achievable, and I have a political attitude within the U.S. establishment that is not necessarily conducive to a better outcome. Hong Kong previously faced similar problems with access to mainland China audit papers, but Alder said the SFC's relationship with the CSRC and a 2019 agreement is https: www.reuters. com article Us-china audit-hongkong idUSKCN 1 TY 1 FZ had helped resolve these issues.

Hong Kong has benefitted from the Sino-U. A string of U.S. listed Chinese companies have carried out secondary listings in the city in recent years, partly due to a back up in case the companies are deslisted from the Nasdaq or NYSE, say market participants.

The Hong Kong stock exchange said last week that it would proceed with rule changes to make it easier for overseas Chinese companies to carry out secondary listings and for companies to change their Hong Kong secondary listing to a primary one.